Tequila Effect

Tequila Effect Definition

Tequila Effect is the informal term referring to the impact of the 1994 Mexican economic crisis, widely known as the Mexican peso crisis. The crisis was caused by the sudden devaluation of the Mexican peso in December 1994 due to president Zedillo's reversal of the former government's policy of tight currency controls. The term is used to describe the domino effect that triggered economic crises in Argentina, Brazil, and other countries in Latin America.